Chiang seeks to set lower consumption tax threshold

Democratic Progressive Party Legislator Chiang Yung-chang (江永昌) yesterday suggested that the government should lower the threshold of the consumption tax refund to boost the amount spent by tourists.

Citing Japan, Chiang told a meeting of the legislature’s Finance Committee that Taiwan should lower its current purchase threshold of NT$2,000 which grants a refund of 5 percent.

Japan currently has a consumption tax refund of 8 percent for foreign visitors if they make purchases totaling ￥5,000 (NT$1,290) in two designated categories of goods.

Japan’s public broadcaster NHK on Monday reported that the government is proposing to simplify the refund program to allow foreign tourists to receive refunds on purchases totaling at least ￥5,000 from next April, without specifying any category of goods.

If Taiwan would follow Japan in lowering the refund threshold, the nation would see an increase in purchases made by foreign visitors, Chiang said, adding that the boost in sales would create additional revenue for the nation’s coffers.

Minister of Finance Sheu Yu-jer (許虞哲) said he agreed to assess the proposal and return with a report within a month.

However, officials at the Ministry of Finance said a lower threshold does not necessarily result in foreign visitors buying more.

They said the current figure is in fact a reduction from the previous level of NT$3,000.

Additional reporting by staff writer

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